I know a person who was in somewhat similar situation, he paid about $400 for an agency that took care of all requests/forms/etc and restored his passport (he never had one before, but technically russian citizen).
You can do it for free, and probably in same time (took about 5 months), but probably more effort required.

Just get the passport and dont worry about anything.
It saved me a cool $150 when traveling to Argentina - free for Ru, visa fee for US :-)
there are other places too.

PS when i said free - you still have to pay consulate, you just wont have to pay extra